The Securities and Exchange Commission (SEC) has said the recent revocation of the licenses of the 53 Fund Management Companies did not happen because of the impact of the banking sector shake-up, ABC News can report
According to the Director-General of the SEC, Rev. Dr. Daniel Ogbarmey-Tetteh, although some collapsed Fund Managers had their funds locked up in Savings and Loans and Microfinance companies that were placed into receivership by the Bank of Ghana, assertions that both instances intertwine with one another ought to be critically examined.
“I wouldn’t say it was a consequence of the banking sector crisis. I would like to say that, it would have happened simultaneously because it’s an ongoing activity and we found out that, the fund managers may invest with a particular entity and they roll over instead of taking the money. It could be that at the time that the investment was made, things were okay. But in the course of time, things could have gone bad without maybe the fund managers picking up the signals,“ he opined.
He added that “So, to say that, it is a consequence of the crisis, I think that it won’t be an accurate representation of the situation because the reality is that there is interconnectedness between the fund managers and the funds regulated by the BoG. Interestingly, some of the fund managers regulated by the Bank of Ghana also placed money with other fund managers. So I think, to say that, this one led to that won’t be fair.”
Rev. Ogbarmey-Tetteh further noted that it is not entirely true that the 53 Fund Management Companies who lost their licenses were managing a customer base of about 56,000 whose funds run in excess of GH¢8 billion out of the total GHc25 billion of the entire securities sector.
The Securities and Exchange Commission last Friday revoked the licenses of 53 Fund Management Companies citing several regulatory breaches.
A press release issued by SEC said the companies, among other things, failed to honour clients’ redemption requests, placed funds in unregulated investments, used clients’ funds to fund related parties’ activities.
Out of the 53 companies, 21 had already ceased operations with the remaining 32 still in operation at the time their licenses were revoked.